1. Daily Derivatives Outlook
4 January 2013
Short Strangles & Straddles
Sell Calls & Sell Puts Nifty and Bank Nifty Option Trades
Simultaneously
Nifty( Jan, Feb, Mar)
Highest Call OI at 6200
Highest Put OI at 5800
Equilibrium at 6000
Buy Nifty 6100 CALL at 54 SL 27
6000C & 6000P
6100C & 5900P Buy Bank Nifty 13000 CALL at 165 SL 82
6200C & 5800P
6300C & 5700P
6400C & 5600P
6500C & 5500P
Bank Nifty(Jan) Stock Option Trades
Highest Call OI at 13000
Highest Put OI at 12000
Buy REC 270 CALL at 5.65
Equilibrium at 12800
12800C & 12800P Buy Dena Bank 130 CALL at 2.2
13000C & 12600P
13200C & 12400P Buy Reliance 880 CALL at 14.35
13400C & 12200P
13500C & 12100P Buy ONGC 280 CALL at 5.5
13600C & 12000P
Buy RCOM 80 CALL at 2.8
USD/INR(Jan)
Highest Call OI at 55 Buy IDEA 110 CALL at 2.75
Highest Put OI at 54
Equilibrium at 54.5 Buy NMDC 160 PUT at 1.75
54.5C & 54.5P
Buy Hero Motors 1900 PUT at 42
54.75C& 54.25P
55C & 54P Buy Titan 280 PUT at 6.8
55.25C & 53.75P
55.5C & 53.5P Buy Tata Power 110 PUT at 2.7
55.75C & 53.25P
56C & 53P
Keynote Capitals Ltd.
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The Ruby, 9 Floor, SenapatiBapatMarg, Dadar (W), Mumbai, India – 400028. Tel: 3026 6000 / 2269 4322

2. NOTES ON OPTION STRATEGIES :
1. Advantages of Options – Profit from Trading range Markets, High Leverage, Built-in
Stop Loss, Higher Probability of Profit using Spread Trades and Increase in trading
opportunities due to multiple legs.
2. Stop Loss : Use 50% stop loss for bought options and 100% stop loss for sold options.
3. Profit Taking : Book profits at 100% for bought options and 50% for sold options.
4. Put Call Ratio ( Open Interest) is bullish at levels between 0.8 to 1.2 and bearish
between 1.75 to 2.
5. Equilibrium strike is with equal Call and Put Open interest with Highest Call Open
interest strike as resistance and Highest Put Open interest as support.
6. Long Call and Long Put are Limited Risk and Unlimited Reward strategies.
7. Short Call and Short Put are Unlimited Risk and Limited Reward strategies.
8. Long Synthetic and Short Synthetic are Unlimited Risk and Unlimited Reward
strategies used instead of futures to save margin.
9. Long Straddle ,Long Strangle and Long Guts are long volatility strategies ahead of
events/results etc.
10. Short Straddle, Short Strangle and Short Guts are Short volatility strategies when
range-bound action is anticipated.
11. Protective Put and Protective Call protect futures positions by buying options.
12. Collar is a combination of the Covered Call and the Protective Put or the Covered Put
and the Protective Call.
13. Covered Call/Ratio Call Write Put and Covered Put/Ratio Put Write cover futures
positions by selling options. They involve unlimited risk and limited reward.
14. Bull Call Spread , Ratio Bull Call Spread and Bull Call Ladder are bullish debit spreads
which involve buying a lower call option and selling upper call options.
15. Bear Put Spread, Ratio Bear Spread and Bear Ladder are bearish debit spreads which
involve buying a upper Put option and selling a lower Put option.
16. Bull Put Spread is a bullish credit spread which involves selling a upper put option and
buying a lower put option.
17. Bear Call Spread is a bearish credit spread which involves selling a lower call option
and buying a upper call option.
18. Long Iron Butterfly is a combination of the Bull Put Spread and Bear Call Spread while
Short Iron Butterfly is a combination of the Bull Call Spread and Bear Put Spread.
19. Long Term Options can be used to create investment grade positions using spreads,
synthetics and covered /protective positions.
20. Calendar/Diagonal Calls is a debit spread involving buying a long-dated call option and
selling a short-dated call option against it ( Diagonal Calls involve different strikes).
21. Calendar/Diagonal Puts is a debit spread involves buying a long-dated put option and
selling a short-dated put option against it ( Diagonal Puts involve different strikes).
Keynote Capitals Ltd.
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The Ruby, 9 Floor, SenapatiBapatMarg, Dadar (W), Mumbai, India – 400028. Tel: 3026 6000 / 2269 4322

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The Ruby, 9 Floor, SenapatiBapatMarg, Dadar (W), Mumbai, India – 400028. Tel: 3026 6000 / 2269 4322